How can used car dealers in Ontario find more inventory in 2026?

The most effective strategies in 2026 are buying directly from consumers before vehicles reach auction, mining dealer CRM and DMS data to identify past customers in positive equity positions, activating service drive acquisition conversations, and building dealer-to-dealer wholesale networks. Auction sourcing has fallen from 27% of dealer inventory in 2019 to roughly 18% today, and wholesale prices remain elevated.

Can buyers still finance a used car in Ontario in 2026?

Yes. The UCDA January 2026 survey confirmed that a majority of used vehicle purchases are still financed through loans arranged at dealerships. Used car loan rates in Ontario currently range from roughly 6.99% for prime borrowers to higher rates for those with challenged credit. Auto financing through dealership finance sources remains the most common path for most Ontario used car buyers.

When will used car prices come down in Canada?

Experts do not expect a return to pre-pandemic prices. Canadian Black Book forecasts that the market will stabilize gradually between 2026 and 2027, but the average used car listing price in Canada was still around CAD $37,500 in early 2025, compared to roughly $18,900 before the pandemic. Depreciation is becoming more predictable, but prices remain elevated.

How does Ontario Underwriters help used car dealers in Southern Ontario?

Ontario Underwriters is a dedicated auto finance source for used car dealerships. We work directly with dealers to get their customers financed, including buyers who do not qualify through traditional bank channels, giving dealers access to a wider range of approvals and helping more deals close.

What is the average used car price in Ontario in 2026?

The national average used car price in Canada was $34,139 in March 2026, up 3.3% year-over-year, according to Clutch's Used Car Pricing Report. Ontario prices are generally in line with this national average.

Used Car Prices in Canada Are Falling. The Headline Number Was Hiding It.

Posted on August 21, 2026August 21, 2026 by Admin

MARKET ANALYSIS · AUGUST 2026

For two years the average price said the market was rising while vehicles quietly got cheaper. In July 2026 that finally flipped. Here is what it means for buying, selling and financing a used vehicle in Southern Ontario.

The short answer: Used car prices in Canada are falling. A comparable vehicle, same model and same age, costs 1.8 percent less than it did a year ago. The national average looked flat only because buyers moved toward newer and larger vehicles.

For buyers: The relief is real if you are shopping vehicles one to six years old, which are 2.3 to 2.5 percent cheaper than a year ago. Below roughly $15,000, prices have barely moved.

For financing: A lower price means a smaller amount financed, a smaller payment and less total interest. With the Bank of Canada holding at 2.25 percent, that improvement is coming from vehicle prices, not from rates.

For dealers: Buyer traffic is holding up, but those buyers are more price sensitive than a year ago. Affordability is deciding which deals close.

For two years, the headline number said used car prices in Canada were rising. For most of those two years, the vehicles themselves were quietly getting cheaper.

Both statements are true. The gap between them explains a lot of what dealers have been feeling on the lot without quite being able to name, and in July 2026 that gap finally closed.

Two of the country’s most detailed used vehicle reports landed within five days of each other this August. CARFAX Canada published its Mid-Year Market Update on August 13, covering June. Clutch published its monthly pricing report on August 18, covering July. Together they explain what the headline number was hiding, and what happens now that it has stopped. We covered the early signs of this shift in Why Are Used Car Prices Dropping? Is This a Trend?

Two reasons a price can go up

An average price can rise for two completely different reasons. Either the things got more expensive, or people bought more expensive things. Those are not the same, and treating them as the same has misled most of the commentary on this market since 2024.

Think of the average house sale price in a city. If it rises, maybe housing got more expensive. Or maybe more people bought four-bedrooms and fewer bought condos that month. Same number, opposite stories, opposite implications for what you should do next.

Clutch separates the two, and the result is the most useful figure in either report.

What actually moved the national average used vehicle price, July 2025 to July 2026

Component	Effect on the average
Buyers shifting toward newer, larger, more electrified vehicles	+$548
Newly arrived models entering the market	+$150
Total mix effect	+$698
Same model, same age, actual price change	−$595 (−1.8%)
Net change in the headline average	+$103 (+0.3%)

The headline says prices rose 0.3 percent over the year. The middle line says a comparable vehicle, same model and same age, costs $595 less than it did last July. That is a 1.8 percent decline sitting underneath a number that reads as flat.

Clutch’s own summary: “Canadians are getting more car, not paying more.”

Why July 2026 was the turning point

That like-for-like discount was 1.3 percent in June, and 1.3 percent a year ago. In July it deepened to 1.8 percent and, for the first time, outweighed the mix shift pushing the other way.

The monthly move says it more plainly. The national average fell 1.0 percent in July, the steepest single-month decline since November, and nearly all of that $325 drop came from vehicles getting cheaper rather than buyers choosing different vehicles. The two forces that had been cancelling each other out stopped cancelling.

Step back and the annual figure has been collapsing all year.

Used car price inflation in Canada has collapsed to zero

Year-over-year change in the national average used vehicle price

July 2025

+7.9%

January 2026

+3.7%

June 2026

+1.6%

July 2026

+0.3%

Source: Clutch Used Car Pricing Report, July 2026

Clutch’s conclusion is blunt: used car inflation in Canada is effectively over.

CARFAX Canada arrives at the same place by a different route. Its national average sat 4.7 percent below last year in June, with the last five months holding in a narrow range near $31,000 to $31,500. In its words, “after declining throughout much of 2025, pricing has largely stabilized during 2026.”

One report measures completed sales, the other measures listings. They agree on direction, which is what matters.

A quick note on the two dollar figures, since they differ. CARFAX puts the average at $31,487, Clutch at $33,786. CARFAX includes any vehicle back to model year 2000 with no mileage cap; Clutch covers only 2016 and newer under 200,000 km. Sixteen model years of older, cheaper stock sit inside the CARFAX number and pull it down. Neither is wrong. If you carry late-model inventory, Clutch is closer to your world. If your range runs older, CARFAX is.

What the mix shift actually is

The $698 is not abstract. It is sitting on every lot in the country.

SUVs keep taking share from cars

Share of used vehicle sales in Canada, July of each year

SUVs, July 2024

58.6%

SUVs, July 2025

61.2%

SUVs, July 2026

64.2%

Cars, July 2026

21.2%

Source: Clutch Used Car Pricing Report, July 2026

SUVs took a record 64.2 percent of used sales in July. Cars fell to 21.2 percent, the lowest in Clutch’s records. CARFAX confirms the same movement from the inventory side, reporting the SUV segment at another record share of total inventory.

The arithmetic is simple. The average SUV sold for $32,689 against $24,425 for a car, a gap of about $8,300. Every point of sales migrating from cars into SUVs lifts the national average without a single vehicle changing price. Three points of share in two years accounts for roughly $250 of that mix effect on its own.

The abandoned segment shows the consequence. CARFAX finds passenger cars posting the largest year-over-year declines of any segment, with the Toyota Corolla down 6.4 percent and the Honda Civic down 5.8 percent. Clutch has the Civic down 6.2 percent. Sedans are being left behind and their prices say so.

Why prices could soften at all

Inventory finally stopped being the binding constraint.

CARFAX reports used inventory up 15.5 percent month over month in June and 2.5 percent year over year. The second figure is the one that matters. Two months earlier, inventory was up 21.6 percent on the month but essentially flat against the prior year: a seasonal build, not a real one. By June it was genuinely above last year for the first time in this cycle.

CARFAX does not overstate it. Supply “remains influenced by the prolonged effects of vehicle production disruptions and lower lease volumes earlier in the decade,” and stays “sufficiently constrained to prevent significant downward pricing pressure.”

That clause is the entire story of the plateau. Supply improved enough to stop prices rising. Not enough to make them fall hard.

Demand tells a matching story. Used transactions hit 277,361 in June, up 1.3 percent on the month but down 2.9 percent on the year, with the first half finishing 4.2 percent behind 2025. The year-over-year decline has narrowed steadily, from 7.2 percent in April to 2.9 percent in June. Recovery, but from below.

The revealing comparison is against new. New vehicle sales are running about 4 percent below last year while used dealer revenues climbed 6 percent year over year. Buyers are not leaving the market, they are moving from new into used. Rising demand alongside easing prices is unusual, and it only works because supply rebuilt fast enough to absorb both.

The plateau is probably already breaking

Clutch cites Canadian Black Book wholesale data: values fell in every week of July, running 0.3 to 0.4 percent per week by late month, with the softening continuing into August at 0.34 percent in the week ending August 15, steeper than the 0.20 percent average for that week across 2017 to 2019.

Retail follows wholesale by roughly two months. That decline has already reached Clutch’s July sold prices. It has not yet reached the June listing prices CARFAX measured, because listings are a month older and asking prices move slowly.

Which means the plateau CARFAX describes is a photograph of a moment that has likely already passed. Clutch says so directly: if August follows July, the national average will sit below its year-ago level for the first time since March 2025, and the ten-month plateau ends on the way down.

Is now a good time to buy a used car? It depends on your budget

Prices are easing, but Clutch finds the relief concentrated almost entirely in newer vehicles. One-to-six-year-old vehicles are 2.3 to 2.5 percent cheaper on a comparable basis. Vehicles seven years and older have barely budged.

Clutch’s phrasing: “Shoppers with newer-vehicle budgets are finding a friendlier market. Shoppers at the entry level are still waiting for theirs.”

Where the price relief actually landed

Like-for-like price change versus a year ago, same model at the same age

1 to 6 years old

2.3% to 2.5% cheaper

7 years and older

Barely moved

Source: Clutch Used Car Pricing Report, July 2026

The budget tiers confirm it. About 22 percent of cars sold under $15,000, 21 percent of SUVs under $20,000 and 19 percent of trucks under $30,000, all essentially unchanged from a year ago.

There is a structural reason, and it will not resolve soon. Relief is arriving through lease returns and trade-ins of vehicles bought during the recovery, which lands squarely in that one-to-six-year band. The 2020 to 2023 production shortfall means older used inventory was never created and cannot be conjured now.

Trucks: the most misread number in either report

The average truck sold for $46,951 in July, down 2.5 percent year over year, the largest drop of any body style. Measured like-for-like, trucks eased only about 1.4 percent, the smallest of any body style.

Both figures are correct, and the whole gap is buyer behaviour. Truck shoppers reached for cheaper trucks and several of the priciest models rotated out of the sold mix entirely. The Ford F-150 shows it in one vehicle: average price down 2.0 percent to $44,563, while a same-age F-150 held its value.

Clutch’s line is worth keeping for the next customer who quotes a falling truck average at you: “Trucks didn’t get cheap in July. Truck buyers got disciplined.”

CARFAX says the same from the listing side, reporting truck pricing elevated despite softer demand. A truck taken on trade has not lost the value the headline implies. But the customer walking in has a smaller budget than last year.

Used EVs: a floor, with a hole underneath it

Both reports single out used EVs as the most dynamic segment, and the same mix trap applies here one segment down.

CARFAX puts the average used EV listing at $42,834 in June, up 1.1 percent on the month and rising for a second straight month, though still 1.7 percent below June 2025. Clutch has the average EV sold price at $41,831 in July, higher than a year ago.

But Clutch’s like-for-like measure tells the real story. Used EVs spent two years as the market’s steepest decliners, at times 10 percent cheaper year over year on a comparable basis. In July that stopped: same EV, same age, flat against last July, while comparable gasoline vehicles fell about 2 percent. The segment that led the market down became its most price-stable corner.

The rising average is the same trap as the headline. Clutch notes the lift comes from what is arriving on the shelf rather than appreciation, with the first used six-figure electric trucks and SUVs entering in small numbers while actual buyers moved toward budget models like the Chevrolet Bolt EUV at $25,011.

The clearest single expression of the floor is the Tesla Model Y at minus 0.4 percent year over year, against nearly minus 9 percent a year ago. Comparable used Teslas were falling more than 10 percent as recently as March; in July they crossed back above zero.

Underneath the floor sits a supply problem both reports flag. CARFAX finds EV inventory “heavily concentrated among higher-priced Tesla models,” with affordable entry-level options “relatively limited,” an imbalance supporting prices even as overall supply expands. Clutch, a month later, catches that concentration starting to shift: non-Tesla EV inventory up about 21 percent off its June low against 6 percent for Tesla, with Tesla’s share of the active shelf sliding from nearly 29 percent in April to 23.5 percent in July.

Meanwhile the bargain window is closing. 46.8 percent of used EVs sold below $35,000, down from 48.8 percent a year earlier. The deeply discounted spring EVs sold through and, with like-for-like prices now flat, the cheap end has stopped refilling.

One thing on the lot is moving faster than everything else: used EVs sold in a median 23 days in July, against 31 for gasoline. The widest gap Clutch has measured, and the fourth consecutive monthly improvement.

What falling prices mean for financing a used car

The Bank of Canada held its policy rate at 2.25 percent in July, citing trade uncertainty and inflation running above target. That matters because it locates where the affordability movement is coming from.

Whatever relief exists in this market is coming from vehicle prices, not from borrowing costs. And since a lower purchase price reduces the amount financed, it reduces both the monthly payment and the total interest paid across the term. The size of the loan does as much work as the rate on it, and the size of the loan is the part that moved.

What this looks like in a payment

A 1.8 percent reduction on a $34,000 vehicle is roughly $600 less financed. On a typical used vehicle term that is a modest monthly saving, but it compounds: less principal means less interest across every month of the term, and a smaller gap to cover at trade-in time.

The more consequential shift is at approval. When the vehicle costs less, the loan-to-value ratio improves, and loan-to-value is one of the levers that decides whether a marginal application gets approved at all. Falling prices do not just lower payments for approved buyers. They move some declined applications into approved territory.

Who actually benefits

The segment finding above decides this. A customer shopping recent model years is buying into a market 2.3 to 2.5 percent cheaper on a comparable basis than a year ago, and financing a correspondingly smaller amount. A customer with $12,000 is shopping in the one part of the market where nothing has improved, and their payment math is exactly where it was last summer.

That split is the practical shape of this market. The headline number reads as flat. Underneath it, the deal got easier for some buyers and did not move at all for others.

What used car dealerships should take from this

Three things follow directly from the data.

Buyer traffic is holding up, but price sensitivity is higher

Used sales are growing while new sales decline. The customers are there. But with the first half running 4.2 percent behind last year and affordability named by CARFAX as “the dominant factor influencing vehicle purchasing decisions,” the deals that close are the ones where the payment works. That puts the financing conversation at the centre of the transaction rather than at the end of it.

The average is flat, but the segments are not

Sedans are falling hardest. Trucks look like they fell but held their value. SUVs keep taking share. EVs found a floor while the rest of the market softened. Acquiring on the headline number will lead you wrong in at least one of those segments.

Matching the vehicle to the approval closes more deals

When buyers are price sensitive and the relief is concentrated in one age band, the fastest path to a signed deal is putting the customer in a vehicle their approval actually supports. That is easier when financing is worked out early and when applications go to more than one lender.

As Shawn Vording, President of CARFAX Canada, put it: “Acquiring inventory is harder than ever. Acquiring the right inventory is a full-time job.”

Frequently asked questions

Are used car prices going down in Canada in 2026?

Yes. In July 2026 a comparable used vehicle, meaning the same model at the same age, cost 1.8 percent less than a year earlier, according to Clutch. The headline average looked flat at plus 0.3 percent only because buyers shifted toward newer and larger vehicles, which added about $698 to the average while actual vehicle prices fell about $595. CARFAX Canada reports its national average listing price at 4.7 percent below last year, holding near $31,000 to $31,500 for five straight months.

Is now a good time to buy a used car in Ontario?

It depends on your budget. Vehicles one to six years old are 2.3 to 2.5 percent cheaper than comparable examples a year ago, and inventory is up 2.5 percent year over year, so buyers in that range have more choice and better pricing. Vehicles seven years and older have barely moved in price, so buyers under roughly $15,000 are not seeing the same improvement.

How does a lower used car price affect my monthly payment?

The purchase price sets the amount you finance, so a lower price reduces both the monthly payment and the total interest paid over the term. It also improves the loan-to-value ratio, which can affect whether an application is approved. With the Bank of Canada holding its policy rate at 2.25 percent since July 2026, the affordability improvement in this market is coming from vehicle prices rather than from lower interest rates.

Can I finance a used car in Ontario with bad credit?

Yes. Financing is available across a wide range of credit situations, including building credit, rebuilding after past issues, no credit history and self-employed income. Approval depends on income, the vehicle itself and how the loan is structured, not on credit score alone. Ontario Underwriters works with used car dealerships across Southern Ontario to arrange financing for their customers.

How can a used car dealership help more customers get approved?

Bring the financing conversation forward rather than leaving it to the end of the sale. Because buyers are more price sensitive than a year ago and the affordability improvement is concentrated in newer vehicles, matching a customer to a vehicle their approval actually supports closes more deals. Working with a dedicated auto finance source that submits to multiple lenders widens the range of customers a dealership can approve.

Why did used car prices look like they were rising when they were actually falling?

Because the national average measures what people bought, not what vehicles cost. Canadians shifted toward SUVs, newer model years and electrified vehicles, which pushed the average up by about $698 over the year. Comparable vehicles got about $595 cheaper at the same time. The two effects cancelled each other out until July 2026, when the price decline finally outweighed the mix shift.

Financing used vehicles in Southern Ontario

Ontario Underwriters is a dedicated auto finance source for used car dealerships across Southern Ontario, serving Toronto, Mississauga, Brampton, Hamilton, London, Kitchener, Windsor, Vaughan, Markham, Oshawa, St. Catharines, Barrie, Guelph and Oakville.

We work with dealers to finance their customers across a wide range of credit situations, and we work with consumers looking for a straightforward way to finance a vehicle.

Dealer partnerships · Apply for financing · info@on-u.org · (437) 345-4477

Sources: CARFAX Canada, Used Vehicle Market Insights, Mid-Year Market Update 2026, released August 13, 2026, covering June, with transaction data from S&P Mobility. Clutch Used Car Pricing Report, published August 18, 2026, covering July, based on Clutch Technologies Inc. retail sales of vehicles model year 2016 and newer under 200,000 km. Canadian Black Book weekly Market Insights via Canadian Auto Dealer.

Ontario Underwriters
A dedicated auto finance source for used car dealerships across Southern Ontario
125 Norfinch Dr Suite 207, North York, ON M3N 1W8 · info@on-u.org

Why Are Used Car Prices Dropping? Is This a Trend?

Posted on August 7, 2026August 7, 2026 by Admin

Market Update · August 2026

Why Are Used Car Prices Dropping? Is This a Trend?

What the Clutch, CARFAX Canada and Canadian Black Book data means for used vehicle buyers, dealers and financing across Southern Ontario.

Used car prices across Canada are falling, and for anyone financing a used vehicle in Ontario, that shift matters more than the headline number suggests. According to Clutch’s June 2026 Used Car Pricing Report, 39 of the 50 most popular used vehicles sold in Canada carried lower prices in June than they did a year earlier. There is one clear exception to the trend: used electric vehicles, which are now selling faster than any other vehicle type in the country.

Here is what the current data shows, and what it means for used car buyers and dealerships across Southern Ontario.

Are used car prices going down in Canada in 2026?

For most vehicles, yes. Clutch found that comparable used vehicles, meaning the same model at the same age, cost about 1.3 percent less in June 2026 than they did in June 2025. Prices have held essentially flat since September 2025.

The individual model numbers show the pattern clearly. The Honda CR-V, Canada’s second best-selling used vehicle, dropped 1.9 percent year over year in June. The Honda Civic, fourth by volume, fell 3.8 percent. The Ford F-150, the top seller overall, rose just 0.2 percent from a year ago and slipped 0.4 percent from the previous month.

Price change on Canada’s top-selling used models

June 2026 compared with June 2025

Price rose
Price fell

Source: Clutch June 2026 Used Car Pricing Report

Clutch chief executive Dan Park described the current stretch as unusual. “This is the first time in a while we’ve enjoyed this kind of price stability for a six-month stretch, so that’s encouraging,” he said. “It’s a good news story for consumers.”

CARFAX Canada’s June 2026 Used Vehicle Market Insights report found a similar plateau. The national average used vehicle listing price reached $31,619 in April, up 0.8 percent from March but down 3.8 percent from a year earlier. CARFAX described prices as having largely leveled off since February after coming down significantly from 2025 levels.

Why are used car prices falling?

The short answer is the economy. Canada recorded two consecutive quarters of negative GDP growth, and that pressure is changing both what Canadians buy and how much they are willing to spend.

Park pointed to the shift directly. “You can see economic softness that is creating less demand overall, and that demand is actually moving towards used vehicles,” he said.

The sales figures show that movement. According to Statistics Canada, used vehicle sales rose 5.8 percent year over year in the first half of 2026, while new vehicle sales fell 5.1 percent over the same period. DesRosiers Automotive Consultants, measuring the full first half, found new vehicle sales down 2.6 percent and used vehicle sales down just 1 percent.

New versus used vehicle sales, first half of 2026

Change compared with the first half of 2025

Sales grew
Sales fell

Source: Statistics Canada, cited in Clutch’s June 2026 report

Buyers are also stepping away from premium brands. DesRosiers data shows luxury vehicle market share fell to 12.5 percent in the first half of 2026, down from 14.4 percent in 2024. That shift toward mainstream vehicles is part of what is pulling average prices down.

What falling used car prices mean for financing in Ontario

For anyone financing a used vehicle, a lower purchase price affects the deal in a direct way. The amount financed is the starting point for every calculation that follows. When vehicle prices come down, the principal comes down with them, which reduces both the monthly payment and the total interest paid across the life of the loan. Think of it the same way as a mortgage: the rate gets most of the attention, but the size of the loan does just as much work.

Interest rates are the other half of that equation, and they have been holding steady. CARFAX Canada noted that the Bank of Canada has maintained its key interest rate at 2.25 percent, which means the recent movement in affordability is coming from vehicle prices rather than from borrowing costs.

For used car dealerships across Southern Ontario, in Toronto, Mississauga, Brampton, Hamilton, London, Kitchener, Windsor, Oshawa, Barrie, Guelph and the surrounding markets, this creates a specific situation. Buyer traffic is holding up, since used vehicle sales are growing while new vehicle sales decline, but those buyers are more price-sensitive than they were a year ago. Deals are being decided on affordability, which puts the financing conversation at the centre of the transaction rather than at the end of it.

Consumer sentiment supports that read. A CARFAX Canada survey found 75 percent of Canadians who purchased a used vehicle in the past year believed they received good or excellent value for money, and 65 percent said used vehicle prices were at least somewhat reasonable.

Key used vehicle numbers at a glance
Measure	Figure	Source
National average used listing price, April	$31,619	CARFAX Canada
Average asking price on dealer lots, early August	$36,900	Canadian Black Book
Average used EV listing price, April	$40,893	CARFAX Canada
Average used Tesla Model 3, June	$28,164	Clutch
Used vehicle transactions, April	254,881	CARFAX Canada
Bank of Canada key interest rate	2.25%	CARFAX Canada

Why are used EVs the exception?

While gasoline vehicles get cheaper, used electric vehicles are moving in the opposite direction. They are selling faster than anything else on the market, and the reason comes down to what Canadians are paying at the pump.

After gas prices surged at the end of February, tied to the conflict between the United States and Iran, Clutch saw EV demand roughly double. “As soon as those gas prices started creeping up, we almost saw a twofold increase in EV demand as a result of that,” Park said.

On Clutch’s own platform, EVs eventually began selling in a median of 11 days, the fastest pace the company has recorded and two and a half times quicker than its gasoline vehicles. Across the used market more broadly, EVs sold in a median of 24 days, six days faster than used gas vehicles and faster than every other vehicle type.

How fast used vehicles are selling

Median days on the market, June 2026

Electric vehicles
Gasoline vehicles

Source: Clutch June 2026 Used Car Pricing Report

Pricing is part of the appeal. The average price of a used Tesla Model 3 rose 0.3 percent month over month to $28,164 in June, but that figure was down 11.7 percent from a year earlier and roughly $6,000 below the average used vehicle price overall. Nearly 48 percent of used EVs are now selling for under $35,000, and about 60 percent go for under $40,000.

Where used EV prices actually land

Share of used EVs selling below each price point

Average used Tesla Model 3

$28,164 down 11.7% from a year ago

Below the average used vehicle price by

$6,000

Source: Clutch June 2026 Used Car Pricing Report

Supply has grown as well. Park pointed to a Tesla production ramp-up in 2022 and 2023 that has significantly increased used EV inventory over the past two years, along with vehicles coming off lease contracts and flowing into the used market.

New EV sales have climbed too. Statistics Canada figures cited by Clutch show new EV sales jumped 74.7 percent year over year in March and 21.2 percent in April, reaching 12.2 percent of new vehicle sales at the spring peak, likely helped by the federal purchase incentive.

Even so, EVs remain a small slice of the used market. On Clutch, EV sales settled at 3.9 percent in June after peaking at 5.7 percent in April. Hybrids accounted for nearly 7 percent, while SUVs made up 63.8 percent of sales.

CARFAX Canada’s data points to the same tension between demand and supply. Among Canadians planning to buy a used vehicle within the next year, 22 percent said they are considering a battery electric vehicle, yet battery electric vehicles made up just 4 percent of used listings in April, and the average used EV listing price rose 4.7 percent month over month to $40,893.

Used EV demand versus used EV supply

April 2026

Considering a used battery electric vehicle

22% of planned used buyers

Battery electric share of used listings

Average used EV listing price

$40,893 up 4.7% from March

Source: CARFAX Canada June 2026 Used Vehicle Market Insights

What the wholesale market shows

The trend at auction lines up with what is happening at retail. Canadian Black Book’s Market Insights report for the week ending August 1 found overall wholesale values declined 0.16 percent, an improvement over the 0.32 percent drop recorded the week before. Car segments fell 0.17 percent and truck and SUV segments slipped 0.15 percent, with both outperforming their pre-pandemic seasonal averages for the same week.

Weekly wholesale value change by segment

Week ending August 1, 2026

Values rose
Values fell

Source: Canadian Black Book Market Insights via Canadian Auto Dealer

Just over 45 percent of segments saw average value movements greater than $100 that week. Auction sale rates ranged from 10.8 percent to 86.9 percent, averaging 46.6 percent. Canadian Black Book noted that auction inventory has returned to typical seasonal levels, though upstream channels continue to get priority access, and demand for high-quality vehicles remains strong on both sides of the border. On the retail side, the average asking price for a used vehicle slipped slightly to $36,900 across approximately 169,000 vehicles listed on Canadian dealer lots.

Is used vehicle supply improving?

Partly. CARFAX Canada reported that used inventory rose 21.6 percent month over month in April as dealers stocked up for the summer selling season. That build did not resolve the underlying shortage, though. Inventory remained essentially flat year over year, a reflection of reduced new vehicle production and lower lease returns earlier in the decade that continue to limit how many vehicles reach the used market.

Transaction volume tells a similar story. There were 254,881 used vehicle transactions in April 2026, up 1.2 percent from March but down 7.2 percent from April 2025.

What to watch through the rest of 2026

Park was clear that the used EV surge is tied to conditions that could change. Consumer demand for EVs is highly elastic to gas prices, and if fuel falls back into the $1.10 to $1.20 per litre range, he expects EV demand to cool with it.

CARFAX Canada also flagged several factors that could shape consumer confidence in the months ahead: ongoing economic uncertainty, the Bank of Canada’s decision to hold its key rate at 2.25 percent, and the upcoming review of the Canada-United States-Mexico Agreement.

For Ontario’s used vehicle market, the practical picture is this. Prices for most vehicles are easing, buyer demand is shifting from new to used, affordability is deciding which deals close, and the one category running against the price trend, used EVs, is being carried by fuel costs rather than by anything structural.

Frequently asked questions

Are used car prices dropping in Ontario and across Canada right now?

Yes, for most vehicles. Clutch found that 39 of the 50 most popular used models in Canada sold for less in June 2026 than a year earlier, and comparable vehicles cost about 1.3 percent less year over year. CARFAX Canada put the national average used listing price at $31,619 in April, down 3.8 percent from the same time last year.

Why are used electric vehicle prices not falling like other used cars?

Demand for used EVs surged after gas prices rose sharply at the end of February, roughly doubling according to Clutch. Used EVs now sell in a median of 24 days, faster than any other vehicle type. CARFAX Canada reported the average used EV listing price rose 4.7 percent month over month to $40,893 in April, with battery electric vehicles making up only about 4 percent of used listings.

How do falling used car prices affect financing a vehicle in Ontario?

A lower purchase price reduces the amount financed, which lowers both the monthly payment and the total interest paid over the term. With the Bank of Canada holding its key rate at 2.25 percent, the recent improvement in affordability is coming from vehicle prices rather than from a change in borrowing costs.

Are Canadians buying more used vehicles than new ones?

Used vehicle sales rose 5.8 percent year over year in the first half of 2026 while new vehicle sales fell 5.1 percent, according to Statistics Canada. DesRosiers Automotive Consultants measured a smaller decline in used sales, down 1 percent for the half, compared with a 2.6 percent drop in new vehicle sales.

Is used car inventory still tight in Canada?

Yes. CARFAX Canada reported that used inventory rose 21.6 percent from March to April as dealers prepared for the selling season, but inventory remained essentially flat year over year, reflecting reduced new vehicle production and lower lease returns earlier in the decade.

Sources: Clutch June 2026 Used Car Pricing Report via Financial Post (July 23, 2026); The Globe and Mail (August 2026); CARFAX Canada June 2026 Used Vehicle Market Insights via Canadian Auto Dealer (June 17, 2026); Canadian Black Book Market Insights via Canadian Auto Dealer (August 5, 2026).

Canada’s Used Car Market at Mid-Year 2026: Wholesale Prices Correct, Retail Holds Steady, and Supply Stays Tight.

Posted on July 10, 2026July 10, 2026 by Admin

Market Update · July 2026

Canada’s Used Car Market at Mid-Year 2026: Wholesale Prices Correct, Retail Holds Steady, and Supply Stays Tight

The mid-year numbers from Canadian Black Book, CARFAX Canada and AutoTrader, and what they mean for used car dealers across Southern Ontario.

The first half of 2026 is in the books. The short version: wholesale values are correcting, retail prices are barely moving, and supply is still tight. For dealers across Southern Ontario, the mid-year numbers from Canadian Black Book, CARFAX Canada and AutoTrader give a pretty clear read on where things stand and what to watch through the fall.

The wholesale correction is real, but it is slowing down

Canadian Black Book says wholesale vehicle values in Canada fell 4 percent in the first half of 2026. Their Used Vehicle Retention Index sat at 128.0 in June, down from 129.7 in May and 8 percent softer than a year earlier. Three of the first four months of the year saw wholesale declines.

What is behind it? CBB points to a few things at once. Geopolitical events whose effects are only now becoming clear, cautious consumers, and the expectation that used supply is about to lift. Daniel Ross, CBB’s director of strategic market insights, says that with the Strait of Hormuz situation settling and a decision reached on CUSMA, the market can finally get a better read on where the rest of 2026 is headed. His call is that the back half of the year will see less value decline than the same stretch of 2025.

The latest weekly numbers back him up. For the week ending July 4, wholesale values slipped just 0.06 percent, a big improvement over the 0.50 percent drop the week before. Cars fell 0.09 percent and trucks and SUVs 0.04 percent, and both did better than the historical average for that week.

Not every segment is moving the same way

Look under the hood of those overall numbers and the segments are pulling in very different directions. In the latest weekly CBB report, mid-size cars posted the strongest gain at 0.85 percent, and sports cars and premium sports cars also edged up. At the other end, subcompact cars fell 1.17 percent, their seventh straight weekly drop, with compact cars down 0.78 percent behind them.

On the truck and SUV side, full-size luxury crossovers and SUVs led the way at 0.81 percent. Full-size vans lost 0.78 percent, subcompact luxury crossovers and SUVs gave up 0.65 percent, and minivans slipped 0.45 percent.

Weekly wholesale value change by segment

Week ending July 4, 2026

Values rose
Values fell

Source: Canadian Black Book Market Insights via Canadian Auto Dealer

Roughly 36 percent of segments moved more than $100 in average value in a single week. Auction conversion rates were mixed, with seasonal conditions, political uncertainty and sellers holding firm on floor prices all playing a part. One thing that has not wavered: buyers are still competing hard for clean, high-quality units, even with a bit more inventory crossing the block.

Retail prices have flattened out

While wholesale corrects, retail is holding its ground. CARFAX Canada’s June report puts the national average used listing price at $31,619 in April, up a modest 0.8 percent from March and down 3.8 percent from a year earlier. Prices have basically flatlined since February after coming down hard from 2025 levels.

AutoTrader measures things differently and lands at $36,713 at the end of March, down 0.3 percent from a year ago and the lowest March reading since 2022. Worth remembering: tariff-driven demand added about $830 to the average used price in 2025, and it took roughly 11 months for that premium to wash out.

CBB’s own retail figure, the average advertised price on Canadian dealer lots, eased to $36,900 in early July across roughly 169,000 listed vehicles.

Three views of the average used vehicle price

Each source measures listings differently, which is why the figures differ

Sources: CARFAX Canada, AutoTrader Price Index, Canadian Black Book

Buyers have noticed the better value. In CARFAX Canada’s latest survey of people who bought a used vehicle in the past year, 75 percent felt they got good or excellent value for their money, and 65 percent found prices at least somewhat reasonable.

Sales are picking up a little, but still trail last year

CARFAX Canada counted 254,881 used vehicle transactions in April, up 1.2 percent from March but down 7.2 percent from April 2025. Call it a modest rebound after a slow start to the year, with volumes still short of where they were twelve months ago.

AutoTrader’s first-quarter data was a bit brighter, showing modest growth in used sales over last year even against a strong Q1 2025 comparison. Every major province except British Columbia sold more used vehicles in the quarter, Ontario included. The new car market softened, which was expected, since a lot of shoppers pulled their purchases forward into 2025 over tariff worries.

Ontario pricing sits below the national average

Where you sell still matters. AutoTrader’s Q1 report puts Ontario’s average used price around $35,060 in March, flat from a year ago and under the national average. British Columbia remains the most expensive used market in the country, and Vancouver carries the highest average listing price of any major city, up 14.3 percent from last year according to CARFAX. The Atlantic region is the only part of Canada with prices rising both month to month and year to year, and even so it is still the second cheapest market, just behind Quebec.

Supply is building, but the shortage is not over

Used inventory jumped 21.6 percent from March to April as dealers stocked up for selling season, per CARFAX. The catch is that the seasonal build has not fixed the bigger problem. Inventory is essentially flat compared with a year ago.

AutoTrader has used days supply at 46 days, up from 40 at this time last year. SUV inventory grew 14.6 percent year over year while car inventory shrank 5.9 percent. SUVs now make up a record 56 percent of all used listings in the country.

Used inventory change by body type

Compared with one year ago

Inventory grew
Inventory shrank

Source: AutoTrader Price Index, Q1 2026

The root cause has not changed. Low new vehicle production and sales from 2020 through 2023 are still choking off lease returns and the flow of used vehicles back into the market, and AutoTrader expects that squeeze to last through 2027. One thing helping on the margins: reciprocal tariffs have cut used vehicle exports, which keeps more supply here in Canada.

What buyers are shopping for

Trucks ruled the first quarter. The top sellers on AutoTrader.ca were the Ford F-150, Nissan Rogue, RAM 1500, GMC Sierra 1500 and Chevrolet Silverado 1500, followed by the Volkswagen Tiguan, Honda CR-V, Honda Civic Sedan, Honda CR-V Hybrid and Toyota RAV4.

On values, CARFAX reports that every one of its most-searched models declined year over year, with sedans like the Honda Civic, Hyundai Elantra and Toyota Corolla taking some of the biggest hits as buyers keep drifting toward SUVs.

Condition is doing a lot of work in pricing too. In April, 30.9 percent of used vehicles listed for sale had reported damage, and those units were listed for an average of $7,464 less than clean ones. The gap swings with the severity of the damage and the type of vehicle, but the message is plain: reported history is worth real money at listing time.

Reported damage and the listing price gap

Share of April 2026 used listings with reported damage

No reported damage 69.1%
Reported damage 30.9%

Average listing gap

$7,464

Vehicles with reported damage list for this much less than undamaged vehicles on average

Source: CARFAX Canada Used Vehicle Market Insights, June 2026

Financing costs are steady, and still high

For dealers whose customers finance, the payment matters as much as the price. Dealertrack Canada data in the AutoTrader report puts the average monthly payment on a used vehicle at $631, down 0.4 percent from last year. New vehicle payments average $915, down 1.7 percent.

Average monthly vehicle payments in Canada

Dealertrack Canada data, March 2026

Used vehicle payment

$631 per month

New vehicle payment

$915 per month

Source: Dealertrack Canada, a Division of AutoTrader, March 2026

Do not expect much movement here. AutoTrader sees payments staying elevated but stable through 2026, since prices are not expected to fall meaningfully, there is little room for rate cuts, and demand looks steady. The Bank of Canada has held its key rate at 2.25 percent as of June.

The EV market is heating up, and running short on supply

Electric vehicles are the liveliest corner of the used market right now. Among Canadians planning to buy a used vehicle in the next 12 months, 22 percent are considering a battery electric vehicle, per CARFAX. Behind that demand: more charging infrastructure and gas prices that averaged 178.8 cents per litre in April, the highest for regular unleaded since July 2022.

Supply has not kept up. BEVs make up just 4 percent of used listings, and what is out there skews expensive. Tesla alone holds 60.4 percent of used EV inventory, mostly Model 3s and Model Ys, while cheaper options like the Nissan LEAF are hard to find. The average used EV listed at $40,893 in April, up 4.7 percent from March after sliding since late 2025.

The used EV picture

April 2026 listings

Average used EV price

$40,893

BEV share of used listings

Used buyers considering a BEV

22%

Tesla 60.4%
All other brands 39.6%

Source: CARFAX Canada Used Vehicle Market Insights, June 2026

The wild card is Chinese EVs landing in Canada this year. Volumes will be small at first, but some BYD models are expected to come in under the price of an average used EV today. With the average EV on AutoTrader sitting just north of $60,000, meaningfully cheaper entrants could pull real demand and put downward pressure on EV pricing over time.

What to watch in the second half

A few things will shape the rest of 2026. The CUSMA review is underway this summer, and its outcome will touch pricing and availability in both the new and used markets. A good result for Canada would go a long way toward restoring consumer confidence. And as the pandemic and last year’s tariff run both showed, big moves in the new car market flow into the used market fast.

CBB expects less value decline over the next six months than in the same period last year, but the mood is far from sunny. New vehicle sales keep slowing, incentives keep climbing, and new market entrants are chipping away at consumer confidence in the legacy brands, especially in EVs. Meanwhile, used supply is expected to start rising, and some in the market say they are already seeing it alongside stagnating inventory.

The longer view from AutoTrader: used prices are unlikely to ever return to pre-pandemic levels, thanks to tighter supply, steady demand, population growth and electrification. But after several chaotic years, both the new and used markets are more stable than they have been in a long time, with inventory improving and prices settling into a new normal.

For dealers, the mid-year takeaway is that this market rewards attention to detail at the segment level. Subcompact and compact car values are sliding week after week while trucks and quality SUVs hold firm, a clean history is worth thousands at listing, and the buyers are out there and seeing value. Affordability is what decides which deals get done.

Frequently asked questions

Are used car prices in Canada going down in 2026?

Wholesale values fell 4 percent in the first half of 2026 according to Canadian Black Book, but retail prices have largely flattened. CARFAX Canada puts the national average listing price at $31,619 in April, down 3.8 percent from a year earlier, while AutoTrader measured $36,713 at the end of March, the lowest March level since 2022. Prices are not expected to return to pre-pandemic levels.

Why is used car inventory in Canada still tight?

Low new vehicle production and sales from 2020 through 2023 are still limiting lease returns and the flow of used vehicles back into the market, and AutoTrader expects the squeeze to last through 2027. Days supply improved to 46 days from 40 a year earlier, and reciprocal tariffs have reduced used vehicle exports, keeping more supply in Canada.

What is the average monthly car payment in Canada in 2026?

According to Dealertrack Canada data in the AutoTrader Q1 2026 Price Index, the average monthly payment on a used vehicle is $631 and on a new vehicle $915. Payments are expected to stay elevated but stable through 2026, with the Bank of Canada holding its key rate at 2.25 percent.

How much does reported damage lower a used vehicle’s price?

In April 2026, 30.9 percent of used vehicles listed for sale in Canada had reported damage, and those vehicles were listed for an average of $7,464 less than undamaged vehicles, according to CARFAX Canada. The gap varies with damage severity and vehicle type.

Sources: Canadian Black Book via Auto Remarketing Canada (July 7, 2026) and Canadian Auto Dealer (July 9, 2026); CARFAX Canada Used Vehicle Market Insights, June 2026; AutoTrader Price Index, Q1 2026.

Why Used Car Inventory Is Still Tight in Canada and How to Source Smarter

Posted on June 3, 2026June 3, 2026 by Admin

Why Used Car Inventory Is Still Tight in Canada and How to Source Smarter in 2026

Why Used Car Inventory Is Still Tight in Canada and How to Source Smarter

Nearly a million vehicles were never built during the pandemic years. Those cars are not coming back. Here is what that means for dealers and buyers in 2026, and what the smarter operators are doing about it.

If you have been trying to stock a used car lot in Southern Ontario lately, you already know the feeling. The cars you want are harder to find, the auction prices are higher than they should be, and your margins are getting squeezed from both sides. This is not a local problem, and it did not start recently.

The shortage of used vehicles across Canada in 2026 has roots that go back more than five years. Understanding those roots is the first step to sourcing smarter, whether you are a dealer trying to keep your lot full or a buyer trying to understand why the car you want costs more than it did a few years ago.

Part One

Why inventory is still tight: the full picture

A million vehicles that were never built

Before the COVID pandemic, Canada was selling roughly two million new vehicles per year. That was the normal pace. When the pandemic hit in 2020, automakers around the world shut down factories. Semiconductor shortages, supply chain collapses, and workforce disruptions made it impossible to build cars at normal volumes. From 2020 through 2023, Canadian new vehicle sales dropped to between 1.5 million and 1.6 million units per year.

That gap, somewhere close to a million vehicles over those four years, is the engine behind everything happening in the used market right now. Daniel Ross, Senior Manager of Auto Industry Insights at Canadian Black Book, explained it plainly: on average, a new car comes back to the market as a used car about four years after it was originally purchased. That means the vehicles that were never built from 2020 to 2023 are exactly the vehicles that should be showing up on used lots right now in 2024 through 2027.

“Those vehicles are not coming back to the market because they were not sold new.” Daniel Ross, Canadian Black Book, via BNN Bloomberg / The Canadian Press, October 2024

2020 to 2023

New vehicle production in Canada drops from 2 million to 1.5 to 1.6 million per year. Semiconductor shortages and factory shutdowns drive the gap. Roughly one million vehicles never built across those four years.

2022 to 2024

Lease returns fall to their lowest level in more than a decade. Drivers hold vehicles longer. Extended leases delay the normal pipeline of quality used inventory returning to dealer lots.

2024 to 2026

The used market feels the full impact of missing production. Canadian Black Book projects supply of 0 to 8 year old vehicles to decline a further 2.6% in 2026. Used car prices remain 15 to 20% above pre-pandemic levels. Dealers report sourcing as their top challenge.

2027 to 2028

Experts including Daniel Ross of Canadian Black Book project that supply issues will likely persist until 2028 before the market gradually normalizes. Prices are not expected to return to pre-pandemic levels.

Canadian new vehicle sales: the production gap

Annual volume (millions of units), showing the pandemic-era shortfall that is now driving used inventory tightness

Actual sales Pre-pandemic average (2M)

Sources: DesRosiers Automotive Consultants, TD Economics Canadian Automotive Outlook (February 2026)

The off-lease pipeline ran dry

One of the most reliable sources of good quality, low-mileage used vehicles has always been lease returns. When a customer finishes a three or four year lease, they hand back a well-maintained vehicle that goes straight back into inventory. Dealerships could count on this pipeline being predictable. That changed completely.

Because so few new vehicles were sold and leased during 2020 to 2022, the number of vehicles coming off lease in 2024 and 2025 is dramatically lower than normal. This is a structural shortage, not a market fluctuation. The vehicles simply were never leased in the first place.

The second part of the problem is what happened to the people who did have leases expiring during the pandemic. Many of them wanted to hand back their car and get something new. But there was nothing new available. So instead of returning the vehicle, they bought it out at the end of the lease. Now those same owners are holding onto vehicles they paid a premium price for, and they are not trading them in either.

Extended lease terms made things worse. Without new vehicles to put customers into, dealerships were extending their clients’ leases rather than letting them expire. Those vehicles stayed off the used market even longer.

The 4 to 12 year segment is where the pain is worst

The UCDA’s January 2026 dealer survey, conducted with DesRosiers Automotive Consultants, identified the 4 to 12 year old vehicle segment as the hardest hit. Many dealers across Canada reported moderate to extreme difficulty sourcing inventory in that age range.

For most independent used car dealers in Southern Ontario, that is exactly the segment that matters most. Vehicles in that age range are what everyday Canadian buyers can actually afford and what financing programs work well for. The shortage hits dealers and buyers at the same time, in the same segment.

How Canadian dealers rated sourcing conditions over the past six months

Survey results: franchised new vehicle dealers vs. independent used car dealers, January 2026

Franchised dealers Independent dealers

Source: UCDA January 2026 Dealer Survey, conducted with DesRosiers Automotive Consultants

Canadians are keeping their cars longer

Trade-ins are one of the main ways used inventory flows back to independent dealers. When a customer buys a new vehicle, they trade in their old one. When a customer upgrades to a different used vehicle, they trade in what they were driving. That cycle has always been a meaningful source of stock.

But Canadians are holding onto their vehicles longer than ever. Economic uncertainty, high vehicle prices, and elevated interest rates have made people more reluctant to change vehicles. In Quebec, the average vehicle age now exceeds 9.8 years, which is a reasonable proxy for what is happening nationally. Fewer trade-ins mean fewer vehicles moving through the system. The pipeline slows down at every point.

Cross-border competition and tariff pressure

There is also a pressure from across the border that gets less attention but has had a real impact on Canadian used vehicle supply. When the Canadian dollar is low, Canadian vehicles become attractively priced for American buyers. Andrew King of DesRosiers Automotive Consultants has noted that around 300,000 used units per year have been flowing south to the United States in recent years, drawn by the exchange rate advantage.

On top of that, the ongoing trade conflict between Canada and the United States has added uncertainty throughout the industry. TD Economics noted in its February 2026 Canadian Automotive Outlook that elevated trade uncertainty is likely to continue weighing on the industry as the first review of CUSMA takes place, and the process promises to be extensive.

The bottom line on why supply is tight: The shortage is not a blip. It is the cumulative result of a million missing vehicles, a broken lease return pipeline, extended ownership cycles, cross-border demand, and a trade environment that adds ongoing uncertainty. Canadian Black Book’s Daniel Ross has said supply issues will likely hold out until 2028.

Part Two

The numbers right now

Survey data published in early 2026 by the UCDA and DesRosiers Automotive Consultants gives the clearest picture of where the Canadian used vehicle market stands.

52%

of franchised dealers said sourcing worsened in the past 6 months

48%

of independent dealers said sourcing worsened in the past 6 months

~10%

of dealers in either group saw any improvement in sourcing

2.6%

further projected decline in 0 to 8 year old vehicle supply in 2026

Those numbers are striking. Nine out of ten dealers in Canada saw no improvement or an actual worsening of their sourcing conditions heading into 2026. Only about one in ten saw things get better. This is not a market where a few unlucky dealers are struggling. It is a market where the structural conditions are challenging for everyone.

What dealers sold in 2025, and what they expect in 2026

The same survey found that franchised new vehicle dealers averaged 354 used vehicle sales per location in 2025, while independent dealers averaged 173. Both groups are optimistic about the year ahead. Franchised stores are projecting an average of 405 units in 2026, and independents are targeting an average of 201. That represents a roughly 15% improvement across the sector.

Average used vehicle sales per dealer location

2025 actual results vs. 2026 projections, by dealer type

2025 actual 2026 projected

Source: UCDA January 2026 Dealer Survey with DesRosiers Automotive Consultants

The demand is clearly there. Canadians need vehicles. More of them are financing, not fewer. The challenge for dealers in 2026 is purely on the sourcing side. If you can get the right cars at the right price, buyers are waiting.

Where is the inventory actually coming from?

The survey revealed a significant structural difference in how franchised and independent dealers are finding their used vehicles. Franchised dealers are winning the consumer sourcing race. They acquired 65.4% of their used inventory directly from consumers through trade-ins connected to new vehicle sales. Auctions accounted for just 17.9% of their supply.

Independent dealers tell a different story. Auctions are still their primary channel at 50.6% of supply. Direct from consumers accounts for 22.4%, and the balance comes from wholesalers and other sources.

Where dealers are sourcing their used inventory

Breakdown by channel, franchised vs. independent, 2025

Franchised dealers

Independent dealers

Consumers / trade-ins Auctions Other channels

Source: UCDA January 2026 Dealer Survey with DesRosiers Automotive Consultants

That gap tells an important story. Independent dealers still rely heavily on the auction lane, while franchised dealers have built strong direct-to-consumer pipelines. In a market where auction supply has shrunk and auction prices have climbed, the dealers who can shift even a portion of their sourcing toward direct consumer buying are in a much stronger position.

Used car prices: where things stand

The supply shortage has kept used car prices well above where they were before the pandemic. AutoTrader.ca data showed that the average used car was priced at around $35,754 in late 2024, compared to about $18,900 in December 2019. That is roughly double in five years. More recent data from early 2025 put the average listing price at about CAD $37,500.

Analysts are not forecasting a return to pre-pandemic prices. Canadian Black Book says the market is beginning to stabilize, with depreciation becoming more predictable, but elevated values are expected to persist. For dealers, this means acquisition costs stay high. For buyers, it means financing the right vehicle at the right monthly payment matters more than ever.

Part Three

How to source smarter: what the leading dealers are doing

The inventory problem is real. But it is not unsolvable. Across Canada and the United States, the dealers who are winning the inventory battle in 2026 are the ones who have moved away from purely reactive sourcing and built proactive systems for finding vehicles before they ever hit the auction block.

The auction lane is no longer a reliable primary strategy

For many independent dealers in Ontario, the auction has been the go-to sourcing method for decades. When you needed to fill holes on the lot, you went to the lane. That model has eroded significantly over the past several years.

According to vAuto and industry data reported by AutoAlert, auction sourcing fell from roughly 27% of dealer used inventory in 2019 to approximately 18% today. That is one third of the auction’s share of dealer sourcing evaporating in just a few years. What used to be a dependable supplemental source has become constricted and expensive.

The Manheim Used Vehicle Value Index remained elevated, up 6.3% year over year as of mid-2025, which means dealers are paying more at auction while competing with more buyers for fewer vehicles. As scarcity drives up wholesale prices, independent dealers often end up overbidding or settling for higher-mileage stock that creates reconditioning challenges.

The shift that matters: The smartest operators in 2026 are moving from reactive buying to proactive acquisition. Instead of going to the auction because they need inventory, they are building systems to get the inventory before it ever gets to auction.

Direct consumer buying and dealer-to-dealer networks

Dealer-to-dealer wholesale and direct-from-consumer buying campaigns have become essential strategies for independent operators who cannot rely on trade-ins the way franchised stores can.

Direct consumer buying means reaching out proactively to past customers, running community buying campaigns, and using online platforms to make purchase offers to private sellers before those sellers decide to try selling on their own or trading in somewhere else. The acquisition price is often better for both sides than what the auction would produce, and the vehicle history is usually more transparent.

Instant trade-in platforms, which let a dealer make a price offer online, get the seller to accept, and arrange pickup without the customer coming to the lot, have become increasingly important sourcing tools in a tight market. The convenience draws more sellers and reduces the friction that can cause a deal to fall apart.

Mining your own customer database

Every dealership has something that often goes completely underused as an inventory source: its own customer history. The average dealership has thousands of sold customers in its CRM and DMS records. Those customers are driving vehicles whose full history the store already knows. Many of them are sitting in positive equity positions on their current vehicle and have no idea.

According to Cars Commerce, 56% of car shoppers plan to trade in their current vehicle when purchasing their next one. That is not just a retail trend; it is an acquisition pipeline sitting in every dealership’s database. The problem is that most stores wait passively for those customers to walk back in. By then, the customer may already be shopping elsewhere, holding multiple online offers, or close to making a decision with a competitor.

The dealers who are winning identify which specific customers are realistically positioned to upgrade, based on factors like current loan payoff, estimated vehicle value, equity position, vehicle age, and service history. Then they reach out proactively with a genuine offer before the customer starts shopping. This approach requires no auction fees, no transport costs, and no competing bids from other buyers.

The service drive as a sourcing channel

When a vehicle comes in for service, the dealership has a direct, trusted interaction with an owner who may be thinking about their next move. The service advisor already knows the vehicle condition. The customer is already on the lot. That moment, handled honestly and at the right time, is a low-cost acquisition opportunity that bypasses every step of the auction process.

This channel is probably the most underleveraged in the independent dealer world. It does not need to be a hard sell. A straightforward, honest conversation about what a vehicle is worth and what the customer’s options look like can result in a clean purchase at a fair price for everyone involved.

What is coming: used EV lease returns

There is one new supply channel that is beginning to open for the first time. Canadian Black Book anticipates that used EV supply will grow in 2026 as off-lease battery electric vehicles start returning to the market, accounting for roughly 11% of total used vehicle supply for the year. That is a meaningful and new channel that was not available even two years ago.

The UCDA survey found that the majority of dealers currently report BEV and PHEV sales accounting for just 0 to 5% of their used volume. Most dealers are not yet actively engaged with used EVs. The dealers who build the knowledge, the processes, and the financing relationships to handle used EV inventory now will have access to a supply channel that their competitors may not yet be equipped to use.

Questions buyers and dealers ask most

Why is it so hard to find a good used car in Ontario right now?

The shortage is structural. Between 2020 and 2023, roughly one million fewer new vehicles were built and sold in Canada compared to the pre-pandemic pace. Since used vehicles typically return to market about four years after original sale, that gap in new production is now showing up as a gap in available used inventory. The 4 to 12 year old segment, which is what most Ontario buyers need and what most used dealerships stock, is where the shortage is worst. Canadian Black Book projects supply will not fully normalize until 2027 to 2028.

Can I still finance a used car in Ontario in 2026?

Yes. The UCDA’s January 2026 dealer survey confirmed that a majority of used vehicle purchases in Canada are still being financed through loans arranged at dealerships. Used car loan rates in Ontario currently start around 6.99% for buyers with good credit. For buyers with challenged credit, rates are higher, but financing options through dealership sources are still available. Most dealers in Southern Ontario work with finance companies that can accommodate a wide range of credit profiles.

Are used car prices going to come down soon?

Probably not to pre-pandemic levels. Canadian Black Book says depreciation is becoming more predictable and the market is starting to stabilize, but the average used vehicle listing price in Canada was still around CAD $37,500 in early 2025, compared to about $18,900 before the pandemic. Prices are expected to ease gradually through 2026 and 2027, but a return to pre-2020 values is not what analysts are forecasting.

What vehicles are easiest to finance through a dealership?

Generally, vehicles that are less than ten years old, with reasonable mileage, and priced within a buyer’s verified budget are the easiest to finance. Lenders prefer these vehicles because they hold their value better and carry lower risk. For buyers with good credit, most mainstream makes and models in the 2015 to 2022 range can be financed at competitive rates through dealership finance sources in Ontario.

The demand for used vehicles in Canada is not going anywhere. Canadians need transportation. Most of them finance it. Dealers who build smarter sourcing pipelines, and who have strong financing partners who can approve a wide range of customers quickly, are the ones who will move the most vehicles and build the strongest businesses over the next two to three years.

Sources

Canadian Auto Dealer, February 2026
UCDA January 2026 Dealer Survey
DesRosiers Automotive Consultants
Auto Service World, March 2026
BNN Bloomberg / The Canadian Press, October 2024
Canadian Black Book via The Car Guide, February 2026
Autosphere, April 2026
AutoAlert, May 2026
TD Economics Canadian Automotive Outlook, February 2026
Indie Garage, February 2026
iSure / Canadian Black Book data
Bob Manor Wholesale Blog, December 2024

Is Your Financing Strategy Keeping Up With the Shifting Used Car Market?

Posted on April 27, 2026June 2, 2026 by Admin

Is Your Financing Strategy Keeping Up With the Shifting Used Car Market? | Ontario Underwriters

Inventory is tighter than ever, prices are holding above $34,000, and buyers are stretching their budgets further to get into a vehicle. For used car dealers across Southern Ontario, these conditions create both pressure and opportunity. Your financing approach needs to keep pace.

$34,139 National avg. used car price, March 2026

+3.3% Year-over-year price increase

2.25% Bank of Canada policy rate (held, March 2026)

−8.2% New car sales YoY, March 2026. Buyers shifting to used.

The Market in Plain Terms

The Canadian used vehicle market has been through a decade of disruptions: pandemic-era production shortfalls, a sharp interest rate cycle, U.S.–Canada tariff friction, and most recently, rising oil prices tied to geopolitical instability in the Middle East. For dealers in Southern Ontario, the cumulative effect is a market that looks stable on the surface but is under considerable stress underneath.

According to Clutch’s March 2026 Used Car Pricing Report, the national average used car price sits at $34,139, up 3.3% year-over-year and holding flat for the seventh consecutive month. That plateau is not a sign of balance; it reflects competing forces pushing in opposite directions. Buyers are price-sensitive, but inventory constraints are keeping values propped up.

Meanwhile, new vehicle sales dropped 8.2% year-over-year in March, according to DesRosiers Automotive Consultants. That decline is not simply a bad month. It reflects tariff uncertainty, economic caution, and the simple fact that new cars cost more than most Ontario households want to finance right now. Those buyers are coming to the used market instead.

Average Used Car Price in Canada: Monthly Trend (2025–2026)

Source: Clutch Used Car Pricing Report, March 2026. Figures in CAD.

Inventory: Still the Underlying Problem

The tightness in used car supply is not a 2026 story. It is the downstream consequence of decisions made between 2020 and 2023. During those years, new car production slowed significantly due to supply chain disruptions, semiconductor shortages, and shifting demand. Fewer new cars sold means fewer vehicles aging into the used market three to five years later.

Industry data specialist Akyurek, quoted in a recent Autosphere report, put it directly: inventory is not expected to recover to pre-pandemic levels before at least 2027. Dealers are managing a smaller pool of quality used vehicles and competing harder for each unit through trade-ins, private acquisitions, and auction channels.

CARFAX Canada’s Q1 2026 Market Insights report noted some improvement, with used vehicle listings reaching 235,577 in March, the highest supply level since August 2025. That is encouraging, but it still represents a structurally constrained market compared to pre-pandemic norms.

The practical result for dealers: each vehicle on the lot carries more weight. There is less room to absorb a deal falling through because of a financing obstacle. When a qualified buyer walks in, the deal needs to close. That starts with having a financing plan that works for a wide range of credit profiles.

Typical Used Car Loan Rate Ranges in Ontario by Borrower Profile, 2026

Sources: WOWA.ca, Finder Canada, autoloanscalc.com. Rates are illustrative ranges; individual approvals vary by lender, vehicle age, and borrower profile.

Affordability Is the Friction at the Deal Table

The Bank of Canada held its policy rate at 2.25% in March 2026, and most economists expect it to remain on hold through the rest of the year. For borrowers, this means the rate environment is not getting worse, and it is not returning to the levels many buyers came to expect in 2019 and 2020.

For used vehicles in Ontario, borrowers with good credit are typically seeing loan rates in the 6.99%–9.99% range. Those with near-prime or challenged credit face rates from 12.9% up to 29.99%, and sometimes higher with deep subprime lenders. According to Statistics Canada data cited by Finder Canada, the average car loan rate has risen nearly two percentage points since 2017 and is not expected to return to pre-cycle lows.

Layer that against a $34,000 average used vehicle price, and the monthly payment math becomes uncomfortable for a large portion of buyers. A $30,000 loan at 9.99% over 72 months works out to approximately $556 per month, not including insurance, fuel, and maintenance. For many households in Southern Ontario managing mortgage renewals, grocery costs, and utilities at the same time, that number is a real barrier.

What this means for dealers is that a growing number of buyers arrive at the lot financially motivated but structurally borderline. They have steady income and genuine need for a vehicle, but their credit file or debt load may not qualify them through a single traditional lender. That is exactly where having access to a dedicated finance source, rather than relying on a single bank, makes the difference between a closed deal and a lost one.

A note on the EV and hybrid shift:

One dynamic dealers should track heading into summer: the used EV market is softening fast. EV prices fell $1,765 in a single month in March 2026 as a wave of off-lease returns hit the market, with over 300,000 units projected for 2026, representing more than a 200% year-over-year increase, according to ACV Auctions research. Hybrids, by contrast, are seeing the opposite: demand outpacing supply, with hybrid searches on Clutch’s platform growing 66% over a 60-day window.

From a financing standpoint, lenders treat EVs with caution due to residual value uncertainty. Used hybrid and gas-powered vehicles remain easier to finance at competitive rates. If you are sourcing inventory, this distinction matters when you are also planning which deals will be easiest to close.

What Dealers in Southern Ontario Should Be Asking

Given current market conditions, it is worth stepping back and asking a few practical questions about your current financing setup:

How many lenders can you actually access? A direct bank relationship gives you one credit window. Working with a dedicated finance source gives you access to multiple financing options simultaneously, including those that serve near-prime and non-prime borrowers. In a market where a larger portion of buyers are borderline, that range matters.

How quickly can you get a deal structured? In a tight inventory environment, deals move fast. A customer who cannot get approval within a reasonable timeframe will look elsewhere. If your current financing process involves extended back-and-forth with a single lender, that is a real cost, even if it is invisible on paper.

Are you losing deals you should be closing? Not every declined application is a dead end. Near-prime borrowers with stable employment, reasonable down payments, and a documented income source often find approval pathways through specialized lenders that a standard bank would not touch. Knowing where those pathways exist is a matter of who you work with.

How are rising vehicle prices affecting your deal structure? At $34,000 average used vehicle prices, loan-to-value ratios are under more scrutiny from lenders than they were two years ago. Understanding what lenders are looking at, including vehicle age, mileage, condition, and how much the buyer is putting down, helps you present deals in the strongest possible light.

Frequently Asked Questions

What are current used car loan rates in Ontario in 2026?

Used car loan rates in Ontario currently range from approximately 6.99% to 9.99% for borrowers with good credit. Those with challenged credit may see rates from 12.9% to 29.99%, depending on the lender and the individual borrower’s profile.

Why is used car inventory still tight in Ontario in 2026?

The root cause is reduced new car production between 2020 and 2023. Fewer vehicles produced during those years means fewer vehicles cycling into the used market today. Lower lease return volumes and longer ownership cycles have added to the constraint.

How does working with a dedicated finance source help dealers?

A dedicated finance source like Ontario Underwriters works with dealers directly to get customers financed, including those who do not qualify through a single traditional bank. This gives dealers access to a wider credit window, which means more applications result in approvals and more deals close.

Will used car prices come down in Southern Ontario in 2026?

Most industry forecasters expect used car prices to remain relatively flat through 2026 and into 2027. Inventory scarcity and sustained demand are keeping values supported. Prices are unlikely to see a meaningful decline until the supply of three-to-five-year-old vehicles improves materially.

Does the Bank of Canada rate hold affect auto loan approvals?

The Bank of Canada’s policy rate held at 2.25% in March 2026. While the overnight rate is not directly tied to auto loan rates, lender prime rates follow broadly the same direction. A hold means the current auto lending environment is stable for now, though individual lenders set their own rates based on risk, competition, and portfolio strategy.

Sources

Clutch Technologies Inc. Used Car Pricing Report, March 2026
CARFAX Canada. Q1 2026 Used Vehicle Market Insights
Bank of Canada. Interest Rate Announcement, March 18, 2026
Globe and Mail. Bank of Canada Interest Rate Decisions
Autosphere. Used Car Trends 2026: Navigating Inventory Scarcity and Growing Hybrid Demand
MoneySense. The State of the Canadian Used Car Market, 2026
Finder Canada. Car Loan Interest Rates in Canada, 2026
ACV Auctions. Used Car Market Trends for 2026
DesRosiers Automotive Consultants via MarkLines. Canada New Vehicle Sales, Q1 2026
WOWA.ca. Car Loan Interest Rates Canada, 2026

How Rising Gas Prices Are Reshaping Used Car Buying in Ontario

Posted on April 6, 2026April 6, 2026 by Admin

Ontario Underwriters · Dealer Newsletter · April 2026

8.2%

Auto sales decline
March 2026 vs 2025

+30%

Gas price increase
since Feb 27, 2026

$0.57

Extra per litre vs
December 2025 low

What’s Driving Gas Prices Right Now

The cause is primarily geopolitical. Ongoing conflict in the Middle East has severely disrupted global oil supply, halting most tanker traffic and sending oil prices soaring worldwide. According to the Canadian Automobile Association, gas prices are up 30% since February 27, with Canada averaging around $1.77 per litre, an increase of 57 cents compared to the December 2025 low. British Columbians are paying the most at $2.00/litre, and Albertans the least at $1.63/litre.

Provincial Prices

Gas prices across Canadian provinces April 2026

Average price per litre · Source: Canadian Automobile Association

Impact on Total Auto Sales in Ontario and Across Canada

The damage to the market is already measurable. DesRosiers Automotive Consultants estimates 170,000 vehicles were sold across Canada in March, down 8.2% from a year earlier. Managing partner Andrew King said high gas prices have added even more financial stress for Canadian consumers, on top of yearlong tariff-related headwinds. On a quarterly basis, 406,000 vehicles were sold in Q1 2026, down 4.4%.

“High gas prices have added even more financial stress for Canadian consumers, in addition to yearlong tariff-related economic headwinds.”

Andrew King, Managing Partner — DesRosiers Automotive Consultants, April 2026

For Ontario used car dealers, this data signals a critical pivot point. Fewer new car sales means more buyers entering the used car market in Ontario, many of whom will need help securing financing.

Sales Data

Canadian auto sales monthly decline

Vehicles sold · Source: DesRosiers Automotive Consultants

2025 2026

How Ontario Used Car Buyers Are Shifting

Trend 01

Overall demand softens, but the Ontario used car market stays resilient

Used vehicle prices across Ontario are expected to remain elevated, as limited inventory, high new vehicle costs, and lingering trade uncertainty keep used cars in high demand. When consumers in Mississauga, Hamilton, Brampton, Kitchener, or anywhere across Southern Ontario cannot afford a new car or are concerned about economic uncertainty, they gravitate to the used car market. That is your dealers’ core opportunity.

Used car dealerships in Ontario that have flexible financing partners in place are best positioned to capture this growing pool of buyers who need a reliable vehicle but cannot access traditional bank loans.

Trend 02

Demand for large SUVs and trucks is softening across Ontario

Analysts began noting a decline in demand for used SUVs even before gas prices soared across Ontario. That demand may fall further if the conflict continues, keeping fuel prices high. In Ontario specifically, used truck prices have dropped more than in any other region in Canada. Softness in the export market, driven by tariff concerns and cross-border uncertainty, is applying downward pressure locally. For buyers in the market for a capable pickup, this represents a real window of opportunity.

Demand Shift

Ontario used car buyer shift

Relative demand change driven by rising gas prices · April 2026

Trend 03

Fuel-efficient used cars are becoming the most in-demand vehicles at Ontario dealerships

Search volume for electric vehicles on the online car retailer Clutch rose 94% from January to late March across Canada. However, EV interest is not necessarily converting to sales at scale, as the upfront cost barrier remains real. Two in ten Canadians say they are more likely to purchase a hybrid (20%) or electric (18%) car for their next vehicle, but nearly one-third say gas prices had no impact on whether they would purchase an alternative fuel vehicle, partly due to the sparse options available in the used car market.

Used hybrids such as the Civic Hybrid, RAV4 Hybrid, Corolla Hybrid, and Niro Hybrid are becoming highly sought-after across dealerships in Hamilton, Mississauga, Kitchener, London, and Barrie. Inventory of those models commands stronger pricing, and buyers are motivated.

Trend 04

Ontario used car buyers need financing more than ever

Gas prices are visible in a way that very few other costs are, and that visibility gives them a disproportionate effect on how Canadians think about the cost of living. Used car buyers across Ontario are entering dealerships more financially stressed and more likely to need alternative financing solutions beyond what traditional banks offer.

The last time Canada faced a significant rise in gas prices was in 2022 at the start of the Ukraine war, when a AAA survey noted that 59% of drivers said they would change their driving habits if gas rose above a certain threshold. The behavioural response this time is expected to be similar or stronger, meaning more budget-conscious buyers are heading to used car lots across Ontario right now.

Buyer Intent

Ontario used car buyer intent next vehicle type

Share of buyers considering each vehicle type amid rising gas prices · Source: Rates.ca

Hybrid (20%) Electric (18%) No change (32%)

Frequently Asked Questions

How do rising gas prices affect used car buying in Ontario?

Rising gas prices push Ontario buyers away from new vehicles and toward the used car market, where affordability is the priority. Demand for fuel-efficient used cars increases, while demand for larger trucks and SUVs softens. Buyers also arrive more financially stressed, making flexible financing solutions more important for Ontario used car dealerships.

Are used car prices going up or down in Ontario in 2026?

Used car prices in Ontario are expected to remain elevated in 2026 due to limited inventory, high new vehicle costs, and ongoing trade uncertainty. While used truck prices in Ontario have dipped due to softer export demand, fuel-efficient vehicles and hybrids continue to command strong pricing at dealerships across Southern Ontario.

Which used cars are most in demand in Ontario right now?

Fuel-efficient models are leading demand across Ontario dealerships. Used hybrids such as the Toyota RAV4 Hybrid, Honda Civic Hybrid, Toyota Corolla Hybrid, and Hyundai Niro Hybrid are among the most sought-after vehicles on used car lots in Hamilton, Mississauga, Brampton, Kitchener, London, and across Southern Ontario.

Why are used truck prices dropping in Ontario?

Used truck prices in Ontario have dropped more than in any other Canadian region due to a combination of softer domestic demand driven by high fuel prices and reduced cross-border export activity caused by tariff concerns and trade uncertainty between Canada and the United States.

Key Sources

BNN Bloomberg — Auto sales fell 8.2% in March (DesRosiers) — bnnbloomberg.ca
The Globe and Mail — Gas prices: crude awakening — theglobeandmail.com
Rates.ca — 30% of Canadians interested in EVs but cost remains a barrier — rates.ca
Clutch Used Car Pricing Report — March 2026 used market data — clutch.ca
CTV News — Rising gas and diesel prices deliver multiple negative economic impacts — ctvnews.ca

Coverage Area

Ontario Underwriters serves used car dealerships across Southern Ontario including Hamilton, Mississauga, Brampton, Kitchener, London, Windsor, Barrie, Oshawa, St. Catharines, Cambridge, Guelph, Burlington, Oakville, Markham, Vaughan, and Toronto. Visit on-u.org or call (437) 345-4477.

Ontario Underwriters Inc. | Southern Ontario’s Used Car Finance
This newsletter is intended for used car dealer partners and prospective dealer partners in Southern Ontario.

Tariffs, Trade Uncertainty & the Used Car Opportunity in Southern Ontario

Posted on March 25, 2026March 25, 2026 by Admin

What Every Used Car Dealer in Ontario Needs to Know, March 2026

Published by Ontario Underwriters | Auto Finance, Southern Ontario

If you operate a used car dealership in Southern Ontario, whether you’re in the Greater Toronto Area, Hamilton, Mississauga, Brampton, London, Kitchener-Waterloo, Barrie, or the Niagara Region, the market conditions right now are working in your favour. New vehicle prices have broken records, trade policy is rattling automakers, and buyers are flowing toward used car lots. But only dealerships with fast, reliable financing partners are capturing those sales.

Here is what is happening in the Canadian auto market this spring, and why your dealership’s financing setup may be the most important competitive advantage you have.

Tariffs Are Driving Canadian Buyers to Used Car Lots in Ontario

Canada’s auto industry is navigating one of its most turbulent trade environments in decades. The wave of U.S.-Canada tariffs introduced throughout 2024 and 2025 have had a lasting, measurable effect on vehicle pricing and used car dealers across Southern Ontario are positioned to benefit.

The average new vehicle in Canada now costs over $63,000, a price point that excludes a wide and growing segment of Ontario’s population. According to AutoTrader Canada and reporting in The Globe and Mail, tariffs added approximately $830 to the average used vehicle price in 2025 meaning that without the trade disruption, used car prices would have softened. Instead, demand held firm.

Key Market Data, Canada Used Car Market 2026

Average used vehicle price in Canada: $35,201 (AutoTrader Canada, end of 2025)
New vehicle sales forecast to fall 4.3% in 2026 (TD Economics, February 2026)
47% of Canadian buyers said tariff concerns changed their vehicle purchase plans, 30% of those shifting to used instead of new (AutoTrader Canada consumer survey, 2025)
Used vehicle inventory expected to stay tight through 2026 and potentially 2027 (DesRosiers Automotive Consultants)
Average monthly auto loan payment in Canada is now approaching $1,000 pushing more buyers toward lower-priced used vehicles

The substitution effect is real and measurable. Consumers who six months ago were considering a new Honda CR-V or Toyota RAV4 are now walking onto used car lots in Hamilton, Brampton, and Mississauga instead. This is a direct, lasting demand shift, not a temporary blip.

The CUSMA Trade Review: Why Used Car Dealers in Ontario Should Pay Attention

The mandatory review of the Canada-United States-Mexico Agreement (CUSMA) is scheduled for July 2026. This trade deal governs virtually every vehicle sold in North America, and the uncertainty surrounding its review is already shaping production decisions and dealer inventory right now.

In February 2026, the U.S. International Trade Commission launched a formal investigation into CUSMA’s automotive rules of origin, examining how North American content requirements affect U.S. competitiveness. The ITC report is due by July 2027. But automakers are not waiting, they are making production decisions today based on worst-case scenarios.

Ontario Production Cuts, What It Means for Dealer Inventory

GM’s Oshawa plant reduced a production shift in January 2026
Stellantis’ Brampton Assembly plant remains idled
Canadian vehicle output forecast to decline roughly 4% in 2026 year-over-year
Fewer new vehicles produced today = fewer trade-ins and off-lease vehicles available to used dealers in 2027 and 2028

For used car dealers in Southern Ontario, this matters because: any disruption to new vehicle production or pricing will extend the wave of buyers flowing into the used market. As Canadian Auto Dealer magazine noted, even modest cost increases under revised trade rules push vehicles out of reach for price-sensitive customers, exactly the customers who turn to independent used dealerships.

The Challenge: More Buyers, But Harder to Finance

Demand is strong. Supply is tight. The market is moving toward used cars. But here is what every used car dealer in Ontario knows from experience: a motivated buyer without approved financing is a lost sale.

The same economic pressures driving buyers to your lot rising costs, inflation, stretched household budgets are also making it harder for those buyers to qualify for traditional bank financing. More of your customers are arriving with:

Credit challenges or bruised credit history
Limited down payment or recent job change
Self-employed or non-traditional income
New Canadian status with limited credit history
Previous vehicle repossession or consumer proposal

These are real buyers, with real need for transportation, who are being turned away by banks and credit unions. They are your customers. And they need a financing who can say yes.

Ontario Underwriters: Auto Finance for Used Car Dealers Across Southern Ontario

Ontario Underwriters is a well-known and trusted auto financing serving used car dealers across Southern Ontario from the GTA to Hamilton, Mississauga, Brampton, Kitchener-Waterloo, Barrie, London, and the Niagara Region. We work exclusively with used car dealerships to get their customers financed quickly, professionally, and with minimal paperwork burden on your team.

We are not a lender. We are your financing partner which means we work the deal on your behalf, accessing multiple lending sources to find the approval your customer needs.

Why Used Car Dealers in Ontario Choose Ontario Underwriters

Fast approvals, your customers get a decision without waiting days
Simple documentation, streamlined process so your team focuses on selling, not filing
Flexible credit, we work with challenged credit, new Canadians, self-employed applicants
Multiple lender access, we find the best available approval for each deal
Dedicated support, a real person who knows your dealership, not a call centre
Well-known across the Southern Ontario used car dealer community
Easy document submission

Ready to close more deals? Partner with Ontario Underwriters today.

Call: (437) 345-4477 | Visit: on-u.org/dealers

Not a partner dealer yet? Getting set up takes minutes. Call us or visit our Dealers page.

Frequently Asked Questions

Do you work with used car dealers outside Toronto?

Yes. Ontario Underwriters works with used car dealerships across all Southern Ontario, including Hamilton, Mississauga, Brampton, Oakville, Burlington, Kitchener-Waterloo, Guelph, Barrie, London, Windsor, St. Catharines, and the Niagara Region. If you are a used car dealer in Ontario, we want to work with you.

Can you finance customers with bad credit at a used car dealership in Ontario?

Absolutely. We specialize in finding financing solutions for customers who have been declined by banks, including buyers with bruised credit, previous bankruptcies, consumer proposals, or limited credit history. We access multiple lenders to find the approval that fits your customer’s situation.

How do used car dealers submit deals to Ontario Underwriters?

It is simple. Partner dealers submit documents through our secure online portal at on-u.org/document-submission or call us directly at (437) 345-4477. We handle the financing process from application to approval so your team can focus on your customers.

How does tariff uncertainty affect used car dealer inventory in Ontario?

U.S.-Canada tariffs have reduced new vehicle production and raised new vehicle prices, which pushes more buyers toward the used vehicle market. At the same time, fewer new vehicles being sold today means fewer trade-ins and off-lease vehicles entering the used market in coming years meaning used car inventory will remain tight in Ontario for the foreseeable future.

Sources

AutoTrader Canada / The Globe and Mail: Canadian automotive market and tariff impact analysis, February 2026
TD Economics: 2026 Canadian Automotive Outlook, February 2026
DesRosiers Automotive Consultants / Used Car Dealers Association: supply and market analysis, 2026
Canadian Auto Dealer Magazine: CUSMA review coverage, December 2025 / March 2026
BNN Bloomberg: U.S. ITC CUSMA automotive rules of origin investigation launch, February 19, 2026
Motor Illustrated: Average new vehicle prices Canada, January 2026
Canadian Black Book: Wholesale vehicle valuation data, early 2026

Ontario Underwriters Inc. | Southern Ontario’s Used Car Finance

This newsletter is intended for used car dealer partners and prospective dealer partners in Southern Ontario

Market Trends and Forecasts for 2026

Posted on March 6, 2026 by Admin

Prices, Supply, Dealer Trends and Buying Insights

DesRosiers Automotive Consultants and the Used Car Dealers Association continue to monitor the rapidly evolving Canadian used vehicle market. As the industry moves through 2026, the market shows signs of stabilization following several years of volatility caused by supply shortages, pandemic disruptions, and rising vehicle costs.

Canada’s used car market remains one of the most important segments of the automotive industry, serving millions of consumers looking for affordable transportation. However, pricing levels, inventory sourcing, and consumer behaviour are continuing to shift.

Used Car Prices in Canada Remain Historically High

Used car prices in Canada remain significantly higher than historical averages, although price increases have slowed compared with the dramatic growth seen between 2021 and 2023.

According to the AutoTrader Canada Price Index, the average price of a used vehicle in Canada was approximately $35,201 in 2025. Prices varied depending on vehicle category, region and age, but the overall trend shows that used vehicles remain far more expensive than they were prior to the pandemic.

Several factors continue to support higher used vehicle prices:

• limited used vehicle inventory
• higher new vehicle prices
• strong consumer demand
• extended vehicle ownership cycles

At the same time, the average price of a new vehicle in Canada exceeded $63,000 in 2025, which continues to push many buyers toward the used vehicle market.

Used Vehicle Supply Remains Tight

Inventory shortages remain one of the most important issues affecting used car dealers in Canada.

The supply of used vehicles available to dealers was heavily impacted by reduced new vehicle sales between 2020 and 2023, when global semiconductor shortages significantly slowed production. Because fewer new vehicles were sold during those years, fewer vehicles are now entering the used market through trade ins or lease returns.

Market analysts at DesRosiers Automotive Consultants note that the impact of this supply disruption will likely continue through 2026 and potentially into 2027.

Additional supply pressure is also coming from cross border vehicle exports, with some Canadian used vehicles being exported to the United States due to favorable exchange rates and pricing differences.

Wholesale Used Vehicle Prices Showing Early Decline

While retail used vehicle prices remain elevated, the wholesale auction market has started to soften slightly in early 2026.

Industry reports from Canadian Black Book show modest declines in wholesale values across several vehicle segments, particularly vans and light trucks.

This softening suggests that supply conditions are gradually improving. However, the impact on retail pricing may take time to appear because dealers must still manage acquisition costs, transportation costs and reconditioning expenses.

Demand for Used Cars in Canada Remains Strong

Demand for used vehicles remains robust across Canada, particularly in urban markets such as Toronto, Vancouver, Calgary and Montreal.

Several economic factors continue to drive consumer demand for used cars:

• high cost of new vehicles
• increased interest rates on auto loans
• growing population and immigration
• affordability pressures on households

Many Canadian buyers are also keeping their vehicles longer than before, which reduces trade ins and further tightens supply in the used vehicle market.

Used Electric Vehicles Entering the Market

Another emerging trend in the Canadian used car market is the gradual increase in used electric vehicles.

Although the majority of used vehicle sales still consist of gasoline powered vehicles, early electric vehicle models are now beginning to enter the used market as leases expire and owners trade them in.

Dealer surveys conducted with the Used Car Dealers Association indicate that used electric vehicles currently represent a small portion of sales but are slowly increasing each year.

Buying Used Cars in Canada: Consumer Trends

Consumers purchasing used vehicles in Canada are becoming increasingly informed and price conscious. Online research has become a key part of the vehicle buying process, with many buyers comparing listings across multiple platforms before making a purchase.

Common trends in used car buying behaviour include:

• longer financing terms
• increased online vehicle research
• expanded geographic search for better deals
• higher demand for reliable SUVs and pickup trucks

Digital marketplaces such as AutoTrader Canada continue to play a major role in connecting buyers with used vehicle dealers across the country.

Market Outlook for 2026 and Beyond

Industry analysts expect the Canadian used vehicle market to gradually stabilize in the coming years as supply improves.

Forecasts suggest:

• used vehicle depreciation may return closer to historical averages
• inventory levels should slowly improve as new vehicle production normalizes
• consumer demand will remain strong due to high new vehicle prices

However, many experts believe that used car prices will remain structurally higher than pre pandemic levels due to the increased cost of producing new vehicles and ongoing global supply chain adjustments.

The Canadian used vehicle market is transitioning into a more balanced phase after several years of disruption. While prices remain elevated and supply constraints persist, early signs of stabilization are beginning to appear.

Used car dealers across Canada continue to adapt to evolving market conditions by improving sourcing strategies, expanding online sales channels, and responding to shifting consumer preferences.

As affordability continues to shape vehicle purchasing decisions, the used vehicle market will remain a critical component of Canada’s automotive landscape.

DesRosiers Automotive Consultants. (2026). Canadian automotive market insights and industry analysis.
Used Car Dealers Association. (2026). UCDA industry resources and dealer market updates.
AutoTrader Canada. (2026). Canadian automotive marketplace and vehicle price index.
Canadian Black Book. (2026). Vehicle valuation data and automotive analytics.

Canada’s Used Car Market After U.S. Tariff Removal

Posted on February 20, 2026February 20, 2026 by Admin

What the Tariffs Did And What Comes Next

On February 20, 2026, the U.S. Supreme Court ruled that most emergency tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were illegal (Time Magazine, 2026). Although these tariffs were U.S. policy, Canada’s automotive industry especially the used vehicle market — experienced measurable and lasting effects.

Because North America operates as a deeply integrated auto market, trade disruptions in the U.S. quickly influenced Canadian pricing, supply chains, and consumer behavior.

This article examines what the tariffs did to Canada’s used-car market and what is likely to happen now that they have been removed.

What the Tariffs Did to Canada’s Used Car Market

Increased Demand for Used Vehicles

Tariff-related uncertainty increased pressure on new vehicle pricing and production planning across North America.

An automotive advisory firm projected that trade-related tariffs could reduce U.S. and Canadian auto sales by approximately 1.8 million vehicles in 2025 (Reuters, 2025).

When new vehicle sales slow:

Fewer trade-ins enter the market
Fewer lease returns return after 2–3 years
Used vehicle inventory tightens

This shift supported stronger demand in Canada’s used car market.

Used Car Prices Remained Elevated Through 2025

National data confirms that used vehicle pricing held firm during the tariff period.

According to Clutch Canada reports:

March 2025 average used vehicle price: $33,197 (Clutch Canada, 2025a)
Late 2025 average price: $33,718 (+4.6% YoY) (Clutch Canada, 2025b)
December 2025 average price: $33,536 (+3.0% YoY) (Clutch Canada, 2025c)

Although minor monthly declines occurred toward the end of the year, annual pricing remained historically elevated.

This reflected:

Limited inventory
Strong consumer demand
High new vehicle pricing

Wholesale Values Showed Strength

The Canadian Black Book Used Vehicle Retention Index measures wholesale market performance.

In 2025:

July 2025: 138.5 points (+2.3% YoY) (Canadian Black Book, 2025a)
November 2025: 135.9 points (Canadian Black Book, 2025b)

Although modest normalization began, values remained historically strong.

What Happens Now That Tariffs Are Removed?

If the tariff removal remains in effect and is not replaced by new trade measures, the Canadian used vehicle market is expected to move toward gradual normalization.

Moderate Price Softening Expected

With tariff-related cost pressures easing:

Production stability should improve
New vehicle supply should normalize
Trade-in flow should gradually increase
Used inventory should slowly expand

Using December 2025’s average price of $33,536 as a baseline (Clutch Canada, 2025c), a realistic 12–18 month projection suggests:

Scenario	Projected Average Price
−3%	~$32,530
−5%	~$31,860
−8%	~$30,850

This represents a potential correction of $1,000 to $2,700 per vehicle.

Inventory Improvement Will Be Gradual

Supply changes occur with a time lag.

0–6 months: Inventory remains tight.
6–18 months: Increased trade-ins and lease returns.
18+ months: Greater market balance.

Wholesale Market Continues Normalizing

Canadian Black Book reported that wholesale retention declined approximately 7.8% in 2024, indicating early-stage correction (Canadian Black Book & Fitch Ratings, 2025).

With tariff removal:

Auction pressure should ease
Bidding intensity may cool
Acquisition conditions may stabilize

Market Outlook for 2026–2027

Market Factor	Expected Direction
Retail used prices	−3% to −8% over 12–18 months
Wholesale values	Gradual softening
Inventory levels	Slow improvement
Market volatility	Decreasing
Competition	Increasing

Final Takeaway

What the Tariffs Did

Supported elevated used vehicle pricing
Tightened supply indirectly
Maintained strong wholesale retention
Reinforced used vehicle demand

What Tariff Removal Is Likely to Do

Improve production and trade stability
Increase used vehicle supply gradually
Ease pricing pressure moderately
Restore market balance

Canada’s used car market is expected to move toward controlled normalization through 2026 and 2027, with modest price easing and improved supply stability.

References

Clutch Canada. (2025a, March). Clutch used car pricing report – March 2025.

Clutch Canada. (2025b). Rearview recap: 2025 used car pricing report.

Clutch Canada. (2025c, December). Clutch used car pricing report.

Canadian Black Book. (2025a, July). Used vehicle retention index – July 2025.

Canadian Black Book. (2025b, November). CBB decreases marginally in November.

Canadian Black Book, & Fitch Ratings. (2025). 2025 vehicle depreciation report.

Reuters. (2025, April 7). Tariffs will lead to fewer auto sales in U.S. and Canada, auto advisory firm says.

Time Magazine. (2026, February). Supreme Court strikes down most of Trump’s tariffs.

Demand Outlook for Used Electric Vehicles in Canada: A Measured but Growing Market Overview

Posted on February 9, 2026February 9, 2026 by Admin

Demand Outlook for Used Electric Vehicles in Canada: A Measured but Growing Market
OverviewThe Canadian automotive market is entering a transitional phase for electric vehicles (EVs). While new EV sales have slowed due to policy shifts, reduced incentives, and consumer caution, demand for used electric vehicles is expected to grow gradually over the next 12–18 months. This growth is driven primarily by affordability, increasing used supply, and long-term electrification trends already embedded in the market.

Current Market Conditions

Recent reporting indicates that Canada has stepped back from aggressive EV sales mandates, replacing them with broader fuel-efficiency standards. This change has reduced short-term pressure on consumers to purchase new EVs and has contributed to softer new-vehicle EV demand .

At the same time, global automakers are slowing EV investment and production plans in response to weaker-than-expected demand, signaling a cooling phase for the new EV market rather than a collapse .

However, these headwinds in the new-vehicle segment do not translate directly to the used EV market.

Why Used EV Demand Is Expected to Increase

Despite slower new EV sales, several structural factors support rising interest in used electric vehicles:

1. Growing Used EV Supply
Canada’s EV parc expanded significantly between 2020 and 2024. As early adopters trade in vehicles and leases expire, more EVs are entering the used market, increasing consumer choice and dealer inventory availability .

2. Improved Affordability
High new-vehicle prices and interest rates have pushed many buyers toward used vehicles. Used EVs offer a lower purchase price while still delivering fuel and maintenance cost savings, making them attractive to value-focused consumers .

3. Changing Buyer Profile
Many consumers who are hesitant to commit to a new EV are willing to test the technology through a used purchase. This trend positions used EVs as an entry point rather than a replacement for new EV demand.

Demand Forecast: Short- and Medium-Term

Based on current reporting and market data, the outlook for used EV demand in Canada can be summarized as follows:

Short term (next 12 months):
Demand is expected to increase modestly, with buyers remaining price-sensitive and focused on proven models. Growth will be uneven across regions and strongest where charging infrastructure is more developed.

Medium term (2–5 years):
As EVs reach typical trade-in age (4–7 years), used EV demand is expected to strengthen more noticeably, supported by wider consumer familiarity, improved charging networks, and competitive pricing versus internal combustion vehicles.

Industry analysts broadly agree that the used EV market will expand steadily rather than rapidly, reflecting a normalization phase rather than a speculative surge .

Implications for Used-Car Dealers

For Canadian used-vehicle dealers, this environment presents both opportunity and caution:

Inventory strategy: Focus on high-demand, proven EV models with realistic range and strong reliability records.

Pricing discipline: Increased supply may put downward pressure on prices, requiring careful appraisal and sourcing.

Customer education: Buyers remain concerned about battery life, charging, and winter performance — dealers who can clearly explain ownership costs and usage realities will have an advantage.

Conclusion

While enthusiasm for new EVs has cooled, the used EV segment in Canada is positioned for gradual growth, supported by affordability, expanding supply, and long-term electrification trends already in motion. For used-car dealers, success in this segment will depend less on volume expansion and more on selective inventory, accurate pricing, and informed sales practices.

References

Reuters Canada expected to scrap EV mandate in favor of new fuel-efficiency system (February 2026).
Reuters Another climate retreat: Canada scraps EV sales mandate (February 2026).
Reuters Automakers scale back EV investments as demand softens (February 2026).
Canadian Energy Regulator (CER) Zero-emission vehicles account for over 10% of new vehicle registrations in Canada (Market Snapshot, 2024).
AutoTrader Canada Interest in EVs is dropping, but affordability drives used EV consideration (2024–2025 market analysis).
Canadian Auto Dealer Magazine Used vehicle market trends and electrified vehicle adoption (2025–2026).